Switzerland Votes to Curb Executive Pay

The Swiss have voted to introduce tough new curbs on executive pay after hefty compensation for bosses of ailing companies caused national outrage.

Polls on 3 March show that about 68 percent supported measures to allow shareholders a veto on executive pay deals and to ban big pay-outs for new and departing bosses.

All 26 Swiss Cantons voted in favour of the measures, with 1.6 million voting for it and 762,000 voting against.

Business groups campaigned strongly against the new laws, arguing that they will deter top talent from working in the country and stifle productivity.

The referendum comes after Swiss bank UBS was bailed out by the government following multi-billion-pound losses and pharmaceuticals giant Novartis announced mass redundancies, yet both companies retained substantial pay for executives and a lavish bonus system.

Public anger was fuelled when Novartis announced in February that it would pay outgoing chairman Daniel Vasella £51 million ($78m) over six years to stop him taking employment with a rival.

Despite later retracting the offer, it added momentum to the reform campaign led by businessman turned politician Thomas Minder.

Those who flout the rules could be jailed and the new rules apply to all companies listed on the Swiss stock exchange.

Brigitte Moser Harder, one of the organisers of the referendum, told the BBC: "From the beginning, 2006, we had the support of the people of Switzerland because you know not everybody in Switzerland is rich.

"It's also a social problem because the high wages got higher and the small ones sometimes just got lower. I think people have the support of the Swiss people because of that."

In Switzerland's 'direct democracy' if a petition gathers 100,000 signatures a national referendum on the issue must be held, meaning popular outrage can be quickly transformed into political action.

This week the EU voted to cap bankers' bonuses at one year's pay, and The Netherlands and Denmark have legislation allowing shareholders a binding vote on executive pay.